President Trump’s radical prices on foreign steel and aluminum entered into force on Wednesday, degenerating America’s commercial spates with global competitors, including nearby allies already in shock from his approach to setting up commercial penalties.
Mr. Trump’s 25% tariffs on metals have reached imports that enter the United States of any country in the world. This decision, including many manufacturers of domestic steel and aluminum supportshould increase costs for American car manufacturers, tin cans, solar panels and other products, potentially slowing down the wider American economy.
The action on metals was only the last attempt of Trump to take advantage of the power of the prices and the American market against foreign governments. Last week, he issuing steep prices On imports from Canada, Mexico and China, accusing these countries for the entry of drugs and migrants to the United States, before quickly Backing some of them. The president threatens to impose a series of other rates, including on foreign cars and against countries that he says he discriminate against the United States.
His approach was met with a market drop And sent many American allies to a defensive mode as they try to decipher what the president really wants. Tuesday, Mr. Trump threatened The Canadian metal rates after Ontario responded to Mr. Trump’s previous prices by adding an additional electricity to the United States. In a few hours, Ontario had suspended its surcharge and Trump fell off.
Metal prices and other future samples are likely to worsen commercial disputes. Foreign governments, including in Canada and Europe, have promised to retaliate by issuing samples that most likely harm American exporters. Metal prices mainly affect American allies: Canada is by far the largest supplier of steel and aluminum in the United States. Brazil, Mexico, South Korea and Vietnam are also the best steel suppliers, while the United Arab Emirates, Russia and China are the best American aluminum suppliers.
The prices restore and extend similar measures that Mr. Trump implemented in 2018, which inaugurated several longtime commercial wars. Trump argued that prices were necessary to protect national security and provide a reliable metal source for soldiers in wartime.
In the years that followed, Trump and former president Joseph R. Biden Jr. have concluded agreements with foreign countries, notably Brazil, Mexico, Canada and the Nations in Europe, which have reduced the prices. The American metal industry complained that the measures were no longer strong enough to maintain steelworks and aluminum foundries.
Kevin Dempsey, the president of the American Iron and Steel Institute, an industry group, said that the prices had been “very effective” compared to previous punctual commercial actions which had only targeted specific countries or specific products.
“Things would be, without these prices, much worse for industry,” said Dempsey.
But because steel and aluminum are used to make so many other products, increase the price of metal will have training effects throughout the American economy. By increasing the costs of basic inputs for many companies, prices could harm manufacturers who ultimately use many more Americans than aluminum grounds and foundries, potentially causing Trump’s plans to strengthen the manufacture of the United States.
An economic analysis Published by the United States International Commerce Commission, an independent and bipartite agency, suggested that Mr. Trump’s first tranche of metal rates won over the gains.
The study revealed that the metallic prices taken in 2018 encouraged steel and aluminum buyers to buy more from American sources, led to an increase in interior metal prices and extended American steel production of around 2% between 2018 and 2021, the years when the report studied.
But the analysis also revealed that prices increased production costs for companies manufacturing cars, industrial tools and machines, reducing production in these downstream industries by around 3.48 billion dollars in 2021. The steel and aluminum industries produced only $ 2.25 billion in metals.
In an effort to mitigate these harmful consequences, the Trump administration this time expanded its steel and aluminum prices to include various downstream goods, or “derivatives”, made with steel and aluminum, such as tractor parts, metal furniture and hinges.
Chad Bown, a principal researcher at the Peterson Institute for International Economics, a research organization, said that this decision was “implicit recognition” that certain industries suffered due to Mr. Trump’s previous prices.
He said that the prices had created a “cascading protection cycle” in which more industries would require government guarantees, and that it “can be difficult to stop” once it is launched.
“Where does it end?” Mr. Bown asked.
The higher cost prospect has also encouraged other American industries, such as car manufacturers, to put pressure on prices on their foreign competitors to protect their businesses. Trump said he was planning to take a price on foreign cars on April 2.
For car manufacturers, metallic prices threaten to increase costs when prices for new cars and trucks are already close to record heights. The average price of a new vehicle in January was more than $ 48,000, according to Edmunds, a market research group.
“Affairs is already a major concern for American car buyers in the midst of high prices and interest rates,” said Jessica Caldwell, information manager at Edmunds.
Robert Budway, the president of the Institute of Can CAN manufacturers, a commercial group that represents companies manufacturing steel and aluminum cans for food, soda, beer and painting, said rates would result in higher packaging costs, which would ultimately be transmitted to American consumers.
Food packaging counted more on imported metals and simply paid more for them, said Budway. According to figures from the Institute, the cost of a steel box increased from 53% from 2019 to 2024, after Mr. Trump imposed his prices for the first time.
“This increases the price,” said Budway.
The measures also seem likely to invite reprisals from foreign countries, bouncing on American exporters.
Canadian officials said they planned to retaliate, adding to the 25% price that their government has put $ 30 billion in American goods this month in response to Mr. Trump’s samples.
“The Government of Canada has been clear about this issue from the start,” said Gabriel Brunet, spokesperson for the Minister of Finance, Dominic Leblanc, who heads Canada’s commercial response. “If the United States advances” with metal or other costs prices, it said on Tuesday, “we will be ready to respond firmly and proportionally.”
The European Union has prepared to retaliate against the prices, which they called “economically counterproductive. “”
Maros Sefcovic, the Commerce Commissioner for the European Union, said in a drop in press on Monday that he went to the United States last month “in search of a constructive dialogue”.
“In the end, as said, one hand cannot applaud,” he said. “The American administration does not seem to be committed to conclude an agreement.”
The EU already has a series of prices – including 25% samples On products like American Whiskey – which will take place at the end of March. A trade focused on the EU system spent a large part of last year According to three diplomats that spoke of the issue of anonymity to discuss a question that is not yet public.
But it was difficult for Europeans to decide how to react to the threat of prices, and European officials also had trouble obtaining their American counterparts on the phone.
Ursula von der Leyen, the president of the European Commission, has not spoken individually with Mr. Trump since his inauguration. Asked when she could do this at a press conference on Sunday, she said that “we will have a personal meeting when the time comes.”
NEAL E. BOUDETTE Contributed reports.
